News: Medicare spending fell in 2020 for the first time in two decades, study found

CDI Strategies - Volume 16, Issue 24

Medicare spending per beneficiary fell 3.6% in 2020, the first time it has declined since 1999, according to a study by the Kaiser Family Foundation. With COVID-19’s arrival, many patients delayed or skipped care altogether; hospice, dialysis, and Part B drugs were the only segments that saw growth among Medicare services and by less than 1%. Spending on Part A and Part B services among Medicare beneficiaries decreased 5.8% from 2019 to 2020, reported HealthLeaders.

The study used data recently released from CMS that showed trends in spending and utilization according to the type of healthcare service used. The largest drops found among such services were imaging services (5.5% decline) and outpatient services (4.8% decline). Total Medicare payments were determined in mid-2019 before the pandemic, however, and so there was a 6.9% increase in federal payments per Medicare Advantage enrollee.

After listing their findings, the authors reflected on the effect the decline will have for healthcare services now. “It is possible that the decline in use could have negative implications for future health if people delayed routine care and screenings or were unable to schedule procedures in a timely manner, missing the opportunity for early diagnosis and treatment,” they explained in the report. “The drop in utilization also has the potential to lead to higher future health care spending if more health care services are required or if treatments are more intensive."

Editor’s Note: You can read HealthLeader’s coverage of this story here. The Kaiser Family Foundation’s new study can be found here.

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